Operation Twist will see the Fed sell about $400bn (£253bn) worth of bonds maturing within three years and swap this for longer-term securities.
Although it puts no new money into the economy, the Fed hopes the move will keep long-term interest rates down and boost mortgage lending and loans to businesses.
It said the action was necessary amid “significant downside risks” to its economic outlook.
“Recent indicators point to continuing weakness in overall labor market conditions, and the unemployment rate remains elevated,” the Fed said in a statement.
“There are significant downside risks to the economic outlook, including strains in global financial markets.”
Meanwhile on Wednesday, the Bank of England said members of its Monetary Policy Committee had considered a new round of quantitative easing to pump money into the economy. The case for more QE was “strengthening”, it said in a statement.
